In the last decade, informal jobs have mushroomed in Pakistan. Part of the reason is the high income tax levy which makes small firms contain costs by hiring cheap labour for informal jobs. Historically, societies have not been able to grow economically without a structured job market. In Tanzania, Ethiopia and the Czech Republic, for example, cheap labour coupled with the scarcity of capital made informal labour predominate even in industry. Clearly, these economies have suffered stagnation as opposed to Taiwan and Vietnam, where the main driver of growth was the formal jobs sector.

With fast automation in all sectors, labour-intensive economies are likely to spiral further downward. Traditionally, in Pakistan, low-cost labour has meant quick income for families that have many mouths to feed. However, this can at best be a survival mechanism for a fledgling economy. Hope for growth can only come from a sound industrial policy that not only creates formal employment but also upgrades the skill level required for those jobs.

Education and training remain the key drivers of economic, industrial and social development as we have seen in many successful economies. Those that have run into roadblocks after a period of intense growth—such as the Philippines and Argentina—have been burgeoning informal economies. Both economies, once successful, struggled due to the exponential growth of their informal sectors, relying on low-skilled labour.

From street vendors to low-wage domestic staff, unskilled handymen to unlicensed midwives, we have seen the unregulated growth of low-wage jobs in Pakistan. Those in low-skill jobs will always be at a disadvantage due to the unsustainable nature of the work, lack of contracts and zero social or legal protection. What’s worse is the lack of economic mobility where generations will be trapped in the disadvantaged strata of society.

For sustained industrial growth, STEAM-based and digital literacy programmes need to be established for quick labour mobility—a paradigm shift from low-paying, low-skilled jobs to learning the ropes for more demanding, high-paying jobs. Developments in technology will essentially result in large gaps between those who are unable to rise to the job demands—therefore falling prey to wage stagnation or lay-offs—and those who can upgrade their skills.

In the absence of a higher education system that can develop the skills required by industry, the government will need to establish programmes to upskill workers in a public-private partnership model. Last year, in a bid to contribute to technological development, 100,000 laptops were handed out on a merit basis to university graduates. Initiatives like these are a case of ‘too little, too late’. It is not so much access to technology that is required but the skills to be able to use the technology. Access can be provided on the job. Yet, without training, technology will still be out of reach for many.

This brings us back to the critical need for education and training to address the skills gap, for growth to be enabled in all sectors of the economy. Higher education institutes worldwide provide part-time jobs to students that enables them to earn a little extra, develop basic skills that will lay the ground for their professional lives and also to help them engage in some networking with industry professionals. Part-time jobs at university have a range of benefits, from learning time-management and interpersonal skills to acquiring work discipline; the students are already on a springboard to support their careers.

In Pakistan, however, the jobs that should be open to students are usually taken by less skilled, low-wage earners. In an informal economy, we can’t strictly classify jobs as open to ‘students only’. There are huge opportunities that we haven’t tapped into. We haven’t yet explored the options available for certifying students for jobs because all these and much more are being managed in an informal capacity by untrained workers.

In many countries, students work in libraries, cafeterias, or as administrative and research assistants in a paid capacity. There are university portals that list the available on-campus jobs, and any certification options such as for first-aid worker jobs. This is where students find preparatory ground for soft skills that will be required in a more formal job environment. Students can also undertake shadow work or apprenticeships within the university IT, marketing or curriculum planning teams.

Gradually, we may be able to stem the tide of informal employment and bring more citizens into the safety net through training and regulation.

-Dawn (Pakistan)/ANN